Purchased Power Adjustment

Amendment

September 17, 2020

Resolution 1423

Purchased Power Adjustment (PPA)

◼ PPA adjusts retail electric rates to reflect changes in

purchased power costs from TVA

◼ Most recently amended in May/June 2020

● Reflect Time Of Use rates

● Reset base rates for current wholesale power costs

● Reflect wholesale power cost credit from TVA long-term

partnership agreement

◼ Proposing new amendment for TVA Pandemic

Relief Credit

TVA Pandemic Relief Credit

◼ TVA Board approved $200 million in Pandemic Relief

Credits for Local Power Companies (LPCs) and TVA

Direct Served Customers

◼ LPC credits have 2 components

● 2.5% credit for standard service power costs

● 2.5% credit for non-standard service power costs

(large commercial and industrial customers)

◼ Credits provided over a period of 12 months

beginning October 2020

Proposed Use of Credits

◼ Credits for non-standard service must be applied

directly to customers’ monthly bills

◼ LPCs have flexibility in use of credits for standard

service

◼ KUB standard service credits estimated at $7.3M

◼ Propose to use standard service credits to provide

utility bill assistance to KUB customers with past due

balances accrued during Pandemic

◼ Requires amendment to PPA

Resolution 1423

◼ Amends PPA to address changes in wholesale

power costs from TVA’s Pandemic Relief Credit

◼ Requires two readings

◼ Second reading in October 2020

Customer Experience Update

September 17, 2020

Automatic Payment Plans

Will Help Reduce Disconnections

Account

Balance

Installment

Months

Number of

Accounts

Total Past Due

Balances

$100-$249.99 3 months 1535 $329,453

$250-$499.99 6 months 6113 $2,202,749

$500-$749.99 9 months 3035 $1,855,824

$750-$999.99 12 months 1729 $1,491,714

$1000+ 15 months 3568 $7,922,925

Totals 15,980 $13,802,665

Customers Appreciate Extended Payment Plans

Quotes from customer calls

“Thank you for what

you’ve done to help everybody

out over this hard time for all of us.”

“I appreciate everything you

all are doing for everyone and for me.”

Handwritten note from customer

Available Sources of Assistance

Source Available

Funds

Low Income Home Energy Assistance (LIHEAP)

Knox Co. 19/20-year remaining funds

$ 1,100,000

LIHEAP CARES Act Supplement* $ 2,300,000

Project Help $ 400,000

TN CARES Grant** (CAC) $ 600,000

Knox County – HUD/TN CARES

(CAC and Centro Hispano)

$ 660,000

TVA LPC Pandemic Relief Credit $ 7,300,000

TVA Community Cares Funding $ 80,000

Total $12,440,000

*Applied as automatic $325 bill credit for previous LIHEAP recipients

** Recently approved and must be spent by November 15, 2020

Communicating about Available Assistance

◼ Media event with assistance partners on August 31

◼ Targeted and general posts on social media

◼ KUB.org information about payment plans and

assistance

◼ Asking agencies and other partners to spread the

word

◼ Developing plan to share assistance information at

schools, churches, and community centers

KUB Last to Resume in Local Area

◼ Resuming after the

summer heat has passed

and prior to winter

heating season

◼ Door notices begin

October 12

◼ First disconnects for

nonpayment October 19

19

OCTOBER

Monday

Communication to Affected Customers

October

September

Bill including waived late fees, first pay plan

installment and one month of usage Postcard explaining payment arrangements

and disconnection date

Bill with past due notice and date to pay to avoid

disconnection

Letter explaining payment arrangements and

disconnection date and Handout with assistance

information

Automated Call explaining payment arrangements

and disconnection date

Automated Call explaining payment arrangements

and disconnection dateDoor Notice notifying customer of pending

disconnect, payment and assistance options

Other Ways to Assist Customers

◼ KUB internal credit ratings not impacted by late

payments during moratorium

◼ Payment transaction and $8 door notice fees waived

through 2020

◼ Last resort is disconnection

◼ If disconnection occurs, waiving required $300

deposit as one-time courtesy

Bill Redesigned to Enhance

Important Customer Touchpoint

◼ Highlights factors that impact bill fluctuations

◼ Addresses common customer questions / concerns

◼ Educates customers on ways to save

◼ Incorporates customer and employee feedback and

industry best practices

◼ Improves readability

Current

Bill

Design

New

Bill

Design

Communicating Bill Improvements to Customers

New bills to customers in October

◼ KUB.org content about new features including video

◼ Social media promotion

◼ News release and media outreach

◼ Customer email with link to web content

◼ Informative bill insert with first bill

◼ Revised “your bill is ready” text message

Video Highlights New Features

Mark B. Whitaker Water Treatment Plant

Emergency Generators Project

September 17, 2020

Water Supply Master Plan Projects

Phase I: Complete Phase II: Underway Phase III: Planning

• Parallel High Service Main

• Electric Upgrades - Ph I

• Engineering Report

• Intake Improvements

• Emergency Generators

• Additional Filters

• Backwash Pump Station

• Backwash Equalization Basin

• 4 MG Clearwell

• Raw Water Main

• Distribution Box Bypass

• Electric Upgrades – Ph II

• High Service Pump Station

• Source Water Resiliency

Project Overview

◼ Water Supply Master Plan (WSMP)

● Increase overall electric resiliency and redundancy at

Mark B. Whitaker Water Treatment Plant (MBW)

● Provide diesel-generator emergency back-up power

system

● WSMP goal of 38 million gallons per day (MGD)

◼ Generator setup similar to Fourth Creek and

Kuwahee Wastewater Treatment Plant installations

Project Information

◼ New 10,000 square foot generator

building

◼ Three 2,500 kilowatt generators

◼ Three 15,000-gallon diesel storage

tanks

◼ 2,500 linear feet of electrical

conduit

◼ Noise mitigation

◼ Expandable for future fourth

generator

Project Schedule

◼ Project bid – February 2018

● Award to Southern Constructors

Inc.

● $12M

◼ Generator delivery – March 2020

◼ Switchgear

● Factory test – May 2020

● Delivery – June 2020

◼ Project complete – December

2020

Design Complements Historic MBW Campus

Collaboration Improves Project

◼ Design consultant CDM-Smith

◼ KUB Engineering

● Project management and coordination

● Design support

● Witness testing

◼ KUB Operations and Overhead

Construction

● System expertise

● Training and site familiarity

● Outage response capabilities

◼ Increased knowledge and ownership of

generators for plant operators

Electrical Resiliency for MBW Plant

◼ Completed work provides power supply resiliency

● Two current KUB reliable feeds

● Diesel generator backup power

◼ Future work will ensure electrical resiliency within the

plant

◼ Reinforces KUB’s commitment to providing high

quality, reliable water.

Broadband Update

September 17, 2020

Today’s Update

◼ Current landscape of broadband

◼ Demonstrated benefits of fiber at KUB

◼ Recent broadband interest survey

◼ What’s next

Current Landscape

◼ Recent years have brought significant change

● Broadband has nearly become a necessity

● Legislative landscape has changed

● Benefits of fiber for utility operations have been

demonstrated

◼ Older analog technologies becoming obsolete

Current Environment

◼ Rural areas still not served at a level required for

basic uses

◼ Constructing and operating a “fiber to the home”

(FTTH) network is expensive

◼ For some, individual expansion of service to their

home is cost prohibitive

Fiber Proving Beneficial at KUB

◼ Analog 4-wire circuits have been replaced by fiber at

an annual cost savings of $0.4M

◼ Fiber provides critical data from wireless advanced

meter towers

◼ Fiber is fast, dependable, and durable

Broadband Survey Overview

◼ Mayor Kincannon requested KUB give a fresh look at

providing broadband service

◼ Initial step is to perform a purchase intent survey

◼ Survey inquires about how people feel about their

current service and KUB providing broadband

service

Survey Results

◼ Customers overall very positive about KUB

● 8.3 on a scale of 10

◼ Customers desire high quality and high-speed

● Some customers cite problems with both

◼ Customers desire choice in their provider

● Many served by only one provider

◼ Customers are interested in KUB providing broadband

service

● 80% interested in KUB

What’s Next

◼ Survey results are positive and reason to continue to

research

◼ Main areas of research

● Customer interest

● Funding models

● Approval/Governance

◼ Details shared in the coming months